21st Century Insurance to Stop Selling Homeowner Policies

21st Century Insurance is ending its three-year experiment with selling homeowner insurance in California, and instead will refer customers to a subsidiary of Calabasas-based Countrywide Credit Industries Inc. for coverage, company officials said Monday.

Woodland Hills-based 21st Century, which is owned by American International Group Inc., said it will stop renewing homeowners’ policies beginning Feb. 21 and will send customers to DirectNet Insurance Agency Inc., which provides homeowner, rental and condo coverage.

21st Century returned to the homeowner insurance market in 1999 after being nearly bankrupted by the 1994 Northridge earthquake. The company, which provides auto insurance to 6% of California drivers and insures drivers in other Western states, was unable to build much market share in California, the only state in which it offered homeowner insurance. The company y insures fewer than 75,000 homeowners, less than 1% of the market, company spokesman Marty Cooper said.

Last year, the company had direct earned premiums of $30 million, which accounts for 3% of the company’s total insurance premiums, Cooper said.

“Rather than beat their heads against the wall, they decided to focus on the auto insurance business and grow that business,” Cooper said.

Cooper said the decision was not influenced by insurers’ growing problem with mold-related claims. Thousands of health and property damage claims related to mold have severely affected the Texas homeowner insurance market, and experts say the problem is spreading to California.